The 24-year-old Colombian, winner of the Giro d'Italia earlier in May, had crashed in Tuesday's 10th stage individual time-trial.
That cost him the race lead as he finished more than 4 minutes down on stage winner Tony Martin of Germany to drop to 11th overall.
But he went down again in a group crash just 20km (12 miles) into Wednesday's 153.4km 11th stage from Pamplona to San Miguel de Aralar and decided enough was enough.
SEE ALSO: Spain's top ten bike rides: The Local gallery
"Nairo Quintana felt pain in his right shoulder and was taken to hospital by ambulance to evaluate if there are any fractures," said a Movistar team statement.
Quintana had begun Tuesday's 36.7km race against the clock with a 3sec lead over Alberto Contador and was within touching distance at the first time check following an early climb.
But he crashed on the descent and went on to lose more than 3min 30sec to the Spaniard, who began Wednesday's stage with a 27sec advantage over Alejandro Valverde.
Quintana's abandonment continues a sorry season for the favourites at Grand Tours. Contador and then-reigning champion Chris Froome both crashed out of July's Tour de France.